Kansas Department of Administration seeks first-year funding for $90–100M ERP modernization; House shifts some enhancements to ARPA

The Kansas Department of Administration asked the Senate Ways and Means Committee on Monday to restore several previously approved budget items and to approve the first-year payment for a multiyear enterprise resource planning (ERP) modernization it estimates will cost $90 million–$100 million.

Department Secretary Adam Proffitt told the committee the department seeks about $26 million in the first year of a three- to five-year modernization and that the effort would replace decades‑old, on‑premise systems used for accounting, payroll, procurement and budgeting. “Our system today is not broken today,” Proffitt said, but moving to a single cloud‑based vendor would reduce manual work and increase operational efficiency.

The request follows a staff overview from Legislative Research analyst Steven Wu, who told the committee the legislature approved roughly $216 million for the department for fiscal 2025 — including about $168 million from the state general fund — while the agency’s request for fiscal 2026 totals about $239 million in all funds, including about $168 million SGF.

Why it matters: The ERP supports central functions used across state agencies; the department said modernization would touch budgeting, accounting, HR, payroll and procurement and that the state would bear ongoing operational costs similar to current spending after implementation.

What the budget items include - ERP modernization: The department estimates a total project cost of about $90–$100 million and requested roughly $26 million in the first year. Proffitt said the Legislative Budget Committee removed enhancement funding, and the House added the first‑year funds back but from the ARPA State Relief Fund, not SGF. - Mail scanning: The department requested restoring $400,000 in SGF to pay for mail‑scanning equipment and a facility built after a “white powder” incident. Proffitt said the equipment is already procured and in operation and that the original appropriation lapsed because it lacked reappropriation language. - Docking State Office Building: The House recommended using ARPA State Relief Fund money to finish renovating the Docking State Office Building and included language tying part of that appropriation to renaming the building to the Robert J. Dole State Office Building; the department said the $19 million for Docking as originally requested for fiscal 2025 was shifted in committee action and will be accounted for differently on committee documents. - Procurement staffing: The agency had requested about $1.3 million and nine FTE to address turnover in the Office of Procurement and Contracts; the Legislative Budget Committee and the House removed funding for those positions. The department told staff it has shifted internal resources to cover procurement functions while seeking long‑term staffing solutions. - Debt consolidation (Series 2025A bonds): The department described a proposal to consolidate several existing debt obligations into a Series 2025A bond; if issued, the Department of Administration would pay the debt service instead of the original agencies, shifting the timing of how those payments show in the FY25/26 budgets.

Committee exchange and context Steven Wu walked the committee through where items appear in the budget summary and noted which reappropriations the Legislative Budget Committee removed and which the House later restored. Senator Patey asked which items remained in the House recommendation; Wu and Proffitt clarified differences in where the Docking and ERP items appear in the green (house shorthand) document.

Senators pressed Proffitt for details about timing and cost. Proffitt said the ERP project would be implemented over several years and that the ongoing operating cost was expected to be “probably in the neighborhood of about $7,000,000 a year,” a modest increase above current aggregated system costs. On the mail scanner he said, “This money was appropriated to us in fiscal 24. This is 100% my mistake. I will own this mistake.”

On Docking, Proffitt described tenant selection and move planning: agencies slated to move into Docking include the Secretary of State, Department of Commerce, the centralized Office of Personnel Services, Division of the Budget, Capitol Police and the Office of Facilities and Property Management. He said the department had designed interiors around the specific agency plans and that moving tenants in is about three months away, with initial occupancy expected around July 1 and additional moves into the fall.

What was not decided The committee record shows disagreement between the Legislative Budget Committee and the House over enhancements and reappropriations; no final vote on the full agency package was recorded during the hearing. The Legislative Budget Committee removed several reappropriations and all enhancement funding in a global motion; the House restored a subset of items and shifted some enhancement funding (notably ERP) to ARPA State Relief Fund in its budget shorthand.

Looking ahead Department officials said they were available for follow‑up questions and would work offline with committee members on technical details. Proffitt emphasized the modernization is a long‑term investment intended to reduce manual reconciliation across multiple legacy systems.